DON'T ROLL THE DICE ~ Clean Up Your Credit for the New Year

~~~~~ HI FOLKS, HERE IS SOME TIPS FOR THE 2015 ~~~~~ Your credit score has a big impact on just about everything you do, from being approved for a credit card to buying a house. To ensure you enter the New Year with the best credit score possible – or are at least on your way there – follow these six ways to manage home-related spending. 1. Postpone that refinance until your credit is squeaky clean. Even a small blemish on a credit report can cost you at closing. Regardless of the size of the debt, if it’s turned over to a collections agency, it will damage your credit score. If you’re looking to buy a house or refinance, that mark on your credit will impact the rate you receive. Tip: Get your credit report beforehand to see if there’s anything damaging. If so, consider postponing a refinance or HELOC (home equity line of credit) until small but potentially costly dings fade over time. 2. Pay your mortgage—now. Not all late payments are created equal: Almost nothing hits your credit score harder than a late mortgage payment. Payment history generally accounts for 35 percent of your credit score, which is bad enough, but credit score agencies consider late home payments to be worse than late credit card or car loan payments. In fact, credit score agency VantageScore will knock off more than 100 points beyond what it would do for delinquent auto loans or credit cards. 3. Cool it on second mortgages and HELOCs. Drawing down a second mortgage or HELOC can have a negative impact on your credit score because 30 percent of your credit score is based on how much you owe to creditors. However, if you pay the loan on time, it will have less of an impact. Also, you can mitigate the credit score damage of a HELOC by staying within 30 percent of the limit. 4. Protect your mortgage to protect your insurance rate. Late payments on your mortgage also may affect your homeowners and automobile insurance rates, potentially costing you hundreds of dollars a year. Insurers may assume that if you’re strapped for cash and pay your bills late, you’re more likely to file a claim because you need the money. 5. Pay your utility bills and property taxes on time. If you’re late on your utility bills and your account is assigned to a collection agency, that agency may report it, causing a drop in your credit score. The good news is that utility companies often don’t bother to report late bills to credit bureaus until your delinquency becomes serious. Interestingly, late payment of property taxes won’t affect your credit score unless you find yourself with a lien on your property. Since liens are public records, they may appear on your credit report and might cause a drop in your credit score. 6. Refinancing? Beware of taking out equity, too. Refinancing your home generally won’t have an impact on your credit score as long as you continue to pay your loan on time. However, if you extract equity in the deal, you could marginally affect your credit score because the amount you owe will increase.